How To Make A Rental Inventory
One of the most common disputes relating to rental properties surrounds damage or wear and tear to furniture, fixtures and fittings. These disputes will centre on the degree of damage, who is responsible and in some cases, who actually owns the item in question. In terms of fixtures and fittings ownership is usually quite straightforward, but furniture and household items brought to and used in the property can sometimes be the focus of arguments, and minor disagreements can often fester into major disputes.
So it is important for both the landlord and tenant that a record is made of the contents and condition of a property. This is to record wear and tear that takes place, but also covers the fact that things change within a property during a tenancy. For example, decorating may take place, repairs and maintenance occurs and also some features may naturally deteriorate in condition. A record of all these features at the start of the tenancy can be referred to throughout and at the end, in order to avoid disputes. And this record is called an inventory.
What is an inventory?
An inventory is an official document recording the condition and contents of a property at the beginning of a new tenancy. This can apply to any rental property, whether it is furnished, part-furnished or unfurnished. The inventory will record the fixtures, fittings and furniture in every room and describe the condition of each room. So this will include the number of sofas, chairs and tables in each room, and also their condition, but it will also record the condition of walls, carpets and windows etc.
The inventory effectively acts as a snapshot in time and records the state of play with the property at the point where a new tenant takes on the property. Therefore, there should be a new inventory drawn up to cover each separate tenancy, and which should remain valid over the period of the entire tenancy agreement.
Sometimes a third party will draw up or at least agree the inventory document, so that the landlord and the tenant can be happy that an unbiased and independent party has carried out an inspection and made a record of what is found. Once agreed, the tenant is largely responsible for any item within the inventory, and any deviation from the contents recorded in the inventory could be the cause of a dispute, in terms of damage or theft, or anything that is considered to be more than fair and reasonable wear and tear.
Why are inventories important?
Inventories are not a legal requirement when renting out a property, but they make sense for both parties and exist in the best interests of both the landlord and the tenant. An inventory reduces the likelihood of a dispute because it provides proof of the condition and contents of a property. However there are some important factors, where the inventory acts to help each party separately.
For the landlord:
The inventory is important because if you have no documented evidence of the condition or contents of the property, it is very hard to make a subsequent claim and a court will most likely side with the tenant.
The landlord also needs to avoid disputes because they are a drain on time and are bad publicity, they also could mean that a property remains empty for a period of time, and void periods cost the landlord money because they are receiving no rental income.
Having a detailed and professional inventory in place may help to attract a better class of tenant or fill a property that was otherwise empty.
Having an inventory may also be a condition of an insurance policy on the property.
For the tenant:
An inventory is critical at the end of a tenancy in deciding whether a tenant receives some or all of their deposit back. A tenancy contract should include written agreement on what factors can affect a deposit being repaid.
An inventory protects the tenant against being made responsible for damage they didn’t cause.
The inventory also records what possessions were made available by the landlord, so if a tenant brought their own mugs or a toaster, for example, they can’t be accused of theft at the end of the tenancy if they take these items with them.
The inventory also acts to protect the tenant if repair and maintenance work is required at a later date. The tenant can show evidence of the condition of a wall at the beginning of the tenancy, for example, if mould has since formed and needs addressing, or if external guttering has become loose or weather-beaten.
Typical features of an inventory
There is no set structure to how an inventory is laid out, it is something of an open-ended format, but it is sensible to make it as detailed and professional as possible, and there are many basic templates online which can be adapted. In most cases the inventory is designed as a form with the name of the room, a basic description, a list of contents, a space to describe the condition and make specific comments, a space for photographs and then a space for each party to sign the document. There may also be a space for comments upon any subsequent re-inspection, or to record remedial work that has taken place.
Once the format has been agreed, the list of items that are typically covered in an inventory include:
Walls and floors – What scuffs, stains and holes are visible? Are there broken floorboards or worn carpet?
Mould – Is there evidence of mould anywhere, or stains or tidemarks? Is this evidence of a bigger issue?
Windows – Are there cracks in the glass, is sealant deteriorating or is there rot or mould in the frames?
Furniture – What individual furniture is in each room, what is its condition, are there stains, wear & tear, ripped fabric, scratches in tables or sideboards etc?
Household goods – What mugs, pots and pans, cutlery, crockery and utensils has the landlord provided and what has the tenant brought themselves?
Cupboards – Note the condition of doors, shelves, hinges and handles.
Electrical appliances – What is provided by the landlord and what has the tenant brought themselves? Have they been tested for electrical safety? What condition are they in?
Lights – Are they safe and working and which bulbs are missing?
Taps – Are they working, are they dripping, what is the water pressure like?
Outside – What is the condition of guttering or fascias and soffits? Is wall cladding cracked or coming off? Are there signs of damp? Are roof tiles cracked or missing?
Garden – What is the condition of grass or paving or decking? Are there plants, bushes or hedges that need looking after?
In addition to the above, an inventory may also take a record of meter readings for water, gas and electricity at the start of a tenancy, to avoid disputes over bills.
Who is responsible for an inventory?
Fundamentally, the landlord is responsible for preparing the inventory and making sure it is accurate and fair at the start of each tenancy, but within this there are other responsibilities which are important to define:
A landlord’s responsibility:
Update the inventory at the beginning of each new tenancy to reflect wear & tear, damage, repairs and improvements made during the previous tenancy.
Carry out regular inspections during the tenancy to identify areas of concern and to be happy that the terms of the tenancy agreement are being adhered to. If these are carried out, the landlord must ask permission to enter the property and must give 24 hours’ notice.
The landlord is responsible for reacting to any reports of defects or damage, or where repairs and maintenance is required. If this is not done, the tenant may record this as evidence, as it will exist as a deviation from the inventory recorded at the beginning of the tenancy.
A tenant’s responsibility
The tenant should try to be present when the initial inventory inspection takes place, so they can understand the detail and standards involved and agree with the landlord what defects and conditional factors were already present when they started their tenancy. For example, sealant around windows may already be deteriorating, but it is still of an acceptable standard to live in the property.
If there is no inventory present when the tenant moves in, they should make a record of every feature of the property that they can, including photos. This will act as evidence and will cover them in the event of any subsequent dispute.
Once the inventory is agreed and the tenant has moved in, the tenant is immediately responsible for all wear and tear of the property, and must report incidents of damage, whether accidental or as a result of an act of God etc.
However the inventory is put together, at the beginning of the tenancy any concerns over condition voiced by either party should be recorded in the inventory document, so that the condition on that specific date is agreed. Ideally, both parties should have a walk-through around the property so that a mutual understanding is established.
How to make an inventory fair
It is not advisable for a tenant to accept and sign an inventory without carrying out their own inspection. This could cause them a huge problem further down the line, even if the landlord has been fair and reasonable in how the inventory has been put together. It is quite easy for a landlord or a tenant to make false claims over the condition or contents of a property, so ideally both parties should be present when the document is drawn up, or an independent third party should carry out the inspection, this is quite common and is also sometimes a stipulation made by deposit protection schemes. This may also include an inspection at the end of a tenancy.
Taking photos that are date stamped is a good way of making an inventory fair, particularly in instances where damage or deterioration already exists, and hence the tenant is absolved of any responsibility for anything that occurred prior to them taking on the lease. It is also important, therefore, to take further photos during or at the end of a tenancy, to show evidence of how a feature or fixture has either stayed the same or deteriorated in a way that is natural and unavoidable, ie. it is general wear & tear.
Whether both parties are present for an inventory inspection or not, they should each review and sign the document, to record the fact that both parties agree on the contents and condition of the property at the outset of the tenancy, and that responsibility for any damage or theft thereafter lies with the tenant.
An action plan for your inventory
Once the inventory is agreed, a copy should be retained by both the landlord and the tenant. It should be kept safe and can be referred to when any future changes are made. This can involve damage that takes place, conditional deterioration such as mould developing, or where the landlord undertakes repairs or modifications, such as decorating or fitting a new shower. Essentially, anything that results in a deviation to what is agreed in the inventory should be recorded, ideally with a date-stamped photo.
At the end of the tenancy, the inventory will be referred to again and another inspection should take place. Both parties should again be present as this will be critical to the returning of a deposit, and discussions can be held over what is or isn’t fair and reasonable wear and tear. This can include on carpets and with sofas etc, where it is accepted that the condition will not remain brand new forever.
For tenancy agreements to work, there needs to be regular communications between the landlord and tenant, and this particularly applies to the inventory. As long as changes, defects, modifications, repairs and damage etc is reported and communicated, and the inventory is amended to reflect this, most subsequent disputes will be avoided.